ERP Manufacturing Insights

Food and Beverage Trends to Look Forward to in 2020

Food and beverage trends to look forward to in 2020

Rarely have Americans had so many choices of what to eat, what to drink, where to do it and how to get it. What were once disruptions are now standards. Meanwhile, new trends are still emerging. And as the trends shaping the food and beverage industry continue to evolve, technology evolves alongside them.

With an ever-evolving range of options for consumers, it’s more vital than ever that food and beverage manufacturers and distributors keep informed on the state of the industry. Some big trends that have been climbing for years are now reaching maturity. At the same time, the innovations that could define the industry tomorrow are beginning to take shape.

Here are 10 of the most-watched trends in food and beverages as the industry heads into 2020. Implementing sound practices using ERP for food manufacturing will be a key tool for addressing many of them. With the right solutions, food and beverage manufacturers can turn these trends into useful and productive opportunities.

1. Regulatory compliance in food and beverage manufacturing.

The upcoming year’s regulatory climate is always a hot issue for manufacturers. And after multiple high-profile food recalls in 2019, it’s definitely possible that food and beverage manufacturers and distributors will see more stringent scrutiny from state and federal regulators. New regulations will go into place for small businesses, and existing regulations may see stepped-up enforcement.

These changes come at a time when many industry insiders say that the industry needs to do more to communicate its commitment to safety. In one study, over a quarter of consumers surveyed said they didn’t trust the food and beverage industry’s safety efforts. Though the FDA itself has said that food is safer than ever before, the recall scares of 2019 have had an undeniable effect on consumer confidence.

Food and beverage manufacturing trends
Regulatory compliance is a hot issue

For these reasons and more, it’s never been more important for businesses to make sure that their operations are in strict regulatory compliance. ERP software will continue to be a major tool that businesses will use to address these issues and ensure that their practices are creating a climate of safety for all consumers. Many ERP software suites simplify regulatory compliance through built-in modules that allow data to be quickly benchmarked against regulatory standards. Whatever strategies and technologies a business uses to address these challenges, the aim is the same: safety for (and, by extension, a relationship of trust with) the consumer.

2. The intersection of consumer goods and cannabis.

With laws changing quickly in many states and cannabis prohibition fully ended across Canada, cannabis-based food and beverage products are here and quickly becoming more popular. Cannabis-infused beverages, candy, baked goods and more are now on the market or arriving soon. Major players in the food and beverage industry have bought stakes in cannabis companies and announced their intentions to create new cannabis-infused products.

Adding to the potential confusion, some of these products contain the non-psychoactive compound CBD, used as an alternative medicinal, while others in areas that have fully legalized cannabis may contain THC (the psychoactive compound typically associated with cannabis). Sorting out the regulatory status and safety credentials of these products is a continuing process that can be complex and potentially fraught with legal risk.

Due to the rapid proliferation of cannabis products and the industry’s quickly evolving nature, it’s important for manufacturers to tread carefully here. Laws are still a confusing patchwork in many cases, so the regulatory compliance tools offered by many ERP software suites can be key. Formula and recipe management tools are likewise important for ensuring an accountable and transparent manufacturing process.

3. Plant-based foods as a mainstream lifestyle.

Manufacturers of plant-based foods have been hard at work to prove that their products can be just as delicious and enjoyable as meat-based ones. The Impossible Burger launched in 2016 and is now firmly part of the mainstream palate. L.A.-based Beyond Meat had an incredible year in 2019, partnering with Dunkin’ Donuts, Tim Hortons and Tesco and reaching a market value of over $11 billion with the help of their plant-based meat substitute products

Flexitarian food lifestyle
The year 2019 saw the rise of the flexitarian” lifestyle

The year 2019 also saw a rise of the flexitarian” lifestyle: consumers who choose to live a partially or mostly vegetarian lifestyle while still occasionally eating meat. One can see the larger trend at work here: the mainstreaming of a lifestyle with a significantly reduced demand for meat products.

That doesn’t mean that meat producers are on the way out — far from it. U.S. meat and poultry production reached 100 billion pounds in 2017, and the market for meat products is still extremely robust. But food manufacturers who want to expand into the substantial market for plant-based meats will find a receptive audience willing to buy.

4. Transparency and clean labels.

Winning consumers’ trust is a major challenge for brands – both new and old. That’s why so many brands are now focusing on clean labels” – simple, easy-to-read ingredient lists and minimally processed foods. These products aim to satisfy the contemporary consumer’s need for transparency as well as to showcase their brands’ commitment to quality.

What it takes to actually achieve a clean label, however, can be tricky to pin down. Many market segments vary in their individual views of what constitutes a clean label. Is a vegetarian burger created from heavily processed vegetables considered to have a clean label?” Does a clean label mean that ingredients must be organic? These are all relevant questions without simple answers.

The FDA’s latest nutrition label regulations went into effect in January of 2020 for manufacturers with $10 million or more in annual sales, so consumers will start to see some fresh, new changes on the Nutrition Fact Panel. Now, labels must show larger serving sizes and nutrition information for the individual serving as well as the entire container, and a larger font must also be used for the calories, among other notable changes.

manufacturing and labeling must be able to back it up. ERP software can be helpful here because of the transparency and visibility it creates throughout the manufacturing process. Moreover, it allows manufacturers to address the many different facets of the clean label” by providing a holistic picture of the process and allowing informed decisions about how to label products in a way that is both honest and appealing.

5. Food and beverages as a startup culture.

For years, startups in food and beverage manufacturing have had stellar success in the food and beverage industry, with many accepting lucrative buyouts from industry power players. Innovation has always been fundamental for success in the food and beverage industry, but today, legacy brands and newcomers alike are more focused than ever on achieving the new and disruptive.

Some large CPG companies are now even starting their own incubator programs such as Pepsico’s Nutrition Greenhouse and Kraft-Heinz’s Springboard. Venture capital and private equity firms have also begun pouring dollars into the food startup market. Companies across the CPG spectrum are looking for the next Annie’s or Wicked Weed Brewing.

Food industry innovators can often accelerate their growth and foster best practices by incorporating ERP solutions. Many ERP software solutions aimed at small businesses and startups are now available. Adopting a suitable ERP platform can be especially critical when it comes to scaling a growing business, as the resource allocation tasks associated with growth can be difficult if decisions are not being made from a centralized database.

6. Probiotics and gut health.

Consumers are increasingly conscious of their microbial health, and probiotic products will continue to be popular. These trends encompass a variety of probiotic foods from yogurt to kefir to kombucha. Their common thread is that they contain live bacteria that have been shown, in some cases, to produce beneficial effects for consumers’ health, particularly their digestion and gastrointestinal functions.

The global probiotic market is forecast to reach $6.95 billion by 2022. It’s part of a larger growth trend in functional foods and nutraceuticals, foods that go beyond the typical nourishment by offering additional health benefits. Consumers are increasingly conscious of how the food that goes into their bodies affects them, and that includes the potential benefits of eating food that affects their internal microbiomes.

Since probiotic products contain live organisms, strict adherence to manufacturing best practices is even more important than normal. It’s vital that all elements of the process be coordinated and that nothing is allowed to slip through the cracks. ERP systems for food and beverage manufacturing offer excellent options for monitoring the processes that create these products and facilitating safe operation.

7. Multiple ways to eat at home.

A night in is an increasingly popular option for many food and beverage consumers. Restaurant delivery services and meal kit delivery services are both still seeing strong growth as consumers, particularly younger ones, opt to enjoy their meals in the comfort of their homes. For many food and beverage manufacturers, that means that keeping food fresh is now an even more urgent priority than usual.

Trends eat at home
Restaurant delivery services and meal kit delivery services are both still seeing strong growth

Capitalizing on this trend will require many manufacturers and distributors to reexamine some long-held assumptions and practices. These can include both reorganizing supply chains to more easily supply fresh ingredients and developing products that will stay fresher for longer. ERP software can provide the fine-tuned control over supply chains and product formulae to allow manufacturers to create the home delivery solutions that customers increasingly demand.

The rise of food delivery and on-demand eating has created a whole new type of kitchen, called the ghost kitchen.” These brick-and-mortar kitchens exist for one reason, and one reason only — to serve hungry patrons takeout. There are no tables, no waiters and no fancy silverware. The result is a whole breed of new establishments that can whip up excellent eats with much lower overhead.

8. Organic and sustainable agriculture.

The trend toward greener agriculture is hardly new, but it’s as potent a market force as ever. Amazon’s 2017 purchase of Whole Foods signaled a general reorientation of the American CPG business toward the better for you” and health food markets. Consumers are increasingly expressing their preference for food created with a conscientious ethos.

For manufacturers just moving into the organic and sustainable food markets, the effort and capital required to overhaul existing processes can be considerable. An ERP software solution can offer strong options for taking on these challenges. From tracking ingredient sourcing to streamlining logistics and supply chain operations, the centralized control and information that ERP software provides can be a vital piece of the puzzle for manufacturers seeking to create organic and/or sustainable products.

9. Convenience and accessibility.

With the enormous variety of food and beverage options on the market,convenience and accessibility will often be the deciding factors that determine where consumers spend their dollars. Consumers increasingly want things on-the-go and packaged in a convenient format that allows them to fit food and beverage products into their lives whenever and wherever they want them.

Food convenience counts big
Convenience counts now more than ever

The most challenging part of this trend is that it interlocks with many others on this list, including the organic and sustainable trends. Consumers don’t just want convenience. They want convenience combined with health foods, probiotics, clean labels and more. Manufacturers and distributors who want to serve the convenience market will need to be prepared to both think big and to consider unconventional solutions.

ERP software can be helpful in creating these solutions because of its ability to show a holistic picture of an organization’s resources and practices. The ability to step back and see the big picture can be a vital tool in developing new ideas and disrupting markets – and good ERP software excels at the big picture.

10. Omnichannel competition.

In 2020, a business that wants to stay competitive in any market must look beyond single-channel operations. Today’s consumer buys through a variety of channels every day,necessitating an omnichannel strategy for businesses. Large brands with wide distribution networks often have the advantage here, so smaller brands must often leverage unconventional solutions, taking advantage of new opportunities for getting their products into stores and in front of consumers.

Omnichannel erp
In 2020, stay competitive in any market by having an omnichannel strategy

Once again, ERP can provide a solid foundation for manufacturers seeking to implement an omnichannel strategy. Omnichannel operations require sophisticated control and understanding of distribution, logistics and resource management. ERP software excels at providing all of these and has proven itself a worthy investment for many manufacturers as they expand into an omnichannel space.

For the food and beverage industry, it’s a time of massive and sweeping change — but with that change comes great opportunity. The 10 trends here are all likely to shake the industry this year, and efficiently allocating resources will be important for any business looking to use them to its advantage. Manufacturers that don’t yet have an ERP solution in place may find this to be an opportune time to implement one. Whatever technology strategies manufacturers and distributors choose to employ, they can be sure that their ability to adapt to a changing technological environment will be critical to their future success.

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